Refund Home Loans (Refund) is adamant its business model will remain unchanged despite reductions of up to 30 per cent in bank commissions.
The brokerage’s business model is based on sharing broker commissions with customers.
Wayne Ormond, Refund’s managing director, claimed franchise applications and loan volumes were flying high in spite of the announcement of widespread bank commission cuts.
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“The cuts have made no difference,” he said. “Our customers decide they are better off dealing with us [compared to other brokers] because they get something from us rather than nothing from them.”
While Mr Ormond conceded that Refund would “slightly adjust” the amount of commission refunded to the client to offset reduced earnings for franchisees, he claimed franchisees were better equipped than other brokers to adapt to the new broking environment.
“I guess the difference between us and other mortgage brokers out there is we’re used to working with reduced commissions,” he said.
Mr Ormond told Mortgage Business that he received around 800 franchise inquiries a month – many of which are from established brokers.
“I think one reason we attract a lot of inquiry from existing brokers is because they are looking to go somewhere with a point of difference.
“All the other brokers out there are doing the same thing; we’re doing something completely different. If you’re not going to go to a bank direct then you’re going to go to a broker that offers a point of difference – or why bother,” he said.
At a glance
• Refund’s business model will remain unchanged despite reductions of up to 30 per cent in bank commissions
• Company claims to receive around 800 franchise inquiries a month – many of which are from established brokers
